M&G has introduced the Innovator fund, a unit trust that aims to provide long-term capital growth by investing in small UK companies that show enough potential to become the market leaders of the future.
Aimed at investors who are willing to put their money in what is a high-risk fund, Innovator will concentrate on a maximum of 35 stocks mostly based in the UK, but with a few overseas companies included.
Up to two thirds of investments will be in technology companies that show promise. M&G believes that despite the recent fluctuations in the technology market, the growth prospects of these small innovative companies remains potentially very promising, especially those which are currently low-priced.
However, technology is still a high-risk area. The recent failure of several dotcom companies has initiated concern about how financially sound many of these companies are, and the success of the fund will depend on careful stock selection.
According to Standard and Poor's Micropal, the M&G British opportunities fund is ranked 33 out of 235 funds, based on £1,000 invested on a bid-to-bid basis with net income reinvested over three years to June 2, 2000.